IFC to acquire 4650000 shares in Modern Dairies

The Board of Directors of Modern Dairies Ltd at its meeting held on May 28, 2008, inter alia, was appraised of the decision of the Company to expand its milk processing capacity ("Project") and in this regard was informed that International Finance Corporation - Washington (IFC-W) has expressed an interest in providing a loan in the amount of upto US$ 8.5 Million and subscribing to 46,50,000 Equity Shares of the Company on a preferential basis, for purposes of the said Project subject to IFC securing the approval of IFC's management and Board of Directors and execution of final documentation in form and substance satisfactory to IFC.

The Board has considered the above financial package proposed by IFC(W) and accordingly decided to obtain the approval of the members of the Company at the Forthcoming Extraordinary General Meeting (EGM) in respect of preferential issue of 46,50,000 Equity Shares on private placement basis to International Finance Corporation -Washington (IFC-W ) in terms of section 81 (1A) of the Companies Act, 1956 ("the Act") at a price of Rs 60 per equity share of the Company, price being not less than the price determined as of the Relevant Date (i.e. May 24, 2008) in accordance with Chapter XIII of SEBI (DIP) Guidelines 2000 for preferential issues, subject to IFC(W) securing the approval of its management and Board of Directors.

To obtain the approval of the Shareholders in terms of Section 293 (1) (d) of the Act to borrow moneys upto an extent of Rs 200 crores including by availing External Commercial Borrowings (ECB) upto an amount of US$ 8.50 Million from International Finance Corporation -Washington (IFC-W).

An Extraordinary General Meeting of the Shareholders of the Company has been fixed on June 23, 2008.

Source : Equity Bulls

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